Paul Harris, CFAZoom Video Communications Inc.ZMBUYMay 11, 2020

It topped $588 during Covid in October 2020, but competition came charging from Cisco, Microsoft, Google and others. Shares fell to about $75 in two years. There were points on the way down when some investors bought in, assuming shares were a bargain. But every time they bought they got burned. The stock was broken, in free fall.

A lesson is not to buy a damaged company (though buy a damaged stock). Zoom was THE Covid stock, but after the pandemic that success vanished as their competitors caught up to them, their cash position vanished and the company could not pivot to a new reality. Shares fell from $588 to the mid-$70s. Buyers along the way figured that shares could not fall further, but they did and those buyers got burned. The stock went into free fall. How to tell a damaged company from a damaged stock? You never know, so to minimize losses always buy and sell in tranches, not all in one shot.

It reports Monday. Is restructuring through layoffs. If it reports any growth, shares will jump. He hopes so.

A tough call. Great people there, but the business model isn't making enough money. They need a merger.